Famed hedge fund manager David Einhorn of Greenlight Capital has filed a lawsuit against Apple in the hopes that it will improve its capital allocation strategy. Greenlight is a large investor of Apple, holding more than 1.3 million shares, and has also issued a letter [link opens PDF] to all fellow shareholders.

In the letter, Einhorn urges shareholders to vote against a proposal that Apple is pursuing that would eliminate its ability to issue preferred stock. Greenlight believes this would "unnecessarily limit the Board's flexibility to distribute preferred stock as a means of unlocking shareholder value," it wrote in the letter. There is currently no preferred stock outstanding. Apple is bundling this proposal in with two other provisions that are considered positive for corporate governance, which Einhorn believes violates the SEC's rules about bundling separate matters into a single proposal.

The suit that was filed today seeks to have Apple unbundle these matters, so they can each be voted on separately. Einhorn remains a long-term shareholder and believer in the fundamental business, while dissatisfied with Apple's capital allocation strategy.